Pakistan's military has built up a huge commercial empire, which will only make it more difficult to dislodge from power.
AS ELECTIONS in Pakistan draw closer, and the agitation over the removal of Chief Justice Iftikhar Chaudhary widens, and talk of a deal between Benazir Bhutto and President Pervez Musharraf picks up, there is intense speculation about whether the General who certainly wants another term in office will shed his military uniform and go civilian.
That he must step down as army chief if he wants to contest the presidential election for another term is one point on which the entire Opposition, including Ms. Bhutto, is united. The Opposition suspects that a continuing standoff between militant Islamists in an Islamabad mosque and the government has been orchestrated by the regime to convey to its western backers that Pakistan needs a ruler in uniform to keep extremist elements tamped down.
General Musharraf may or may not make the transition to plain Mr. Musharraf. But a new book by a Pakistani writer argues that irrespective of whether it is a civilian or a general at the helm, so deep has the military sunk roots in the national economy, and so vast are its business dealings, that in order to protect this empire and its associated vested interests, the army, especially, will continue to have an important say in how Pakistan is run. Military Inc. Inside Pakistan's Military Economy by Ayesha Siddiqa (Pluto Press, London; Oxford University Press, Pakistan) is a detailed exposition of the business and commercial empire run by the armed forces.
The author is a well-known strategic affairs analyst. The central argument of her book is that `Milbus' (combining the words military and business) perpetuates the military's political predatory style. Its good health is dependent on the military's influence over state and society. In other words, profit is directly proportionate to power. And, that this is both a cause and effect of a non-democratic political system.
Ms. Siddiqa defines `Milbus' as military capital used for the personal benefit of the military fraternity. It refers to all activities that transfer resources from the state to an individual or a group within the military. These activities do not figure in the defence budget nor are they subject to the normal accountability procedures of the state. They are either directly controlled by the military or enjoy its implicit or explicit patronage.
The beneficiaries are primarily officers, both serving and retired, but the author says the `Milbus' harvest is reaped by a wider circle of civilian businessmen and politicians who have decided in their own interests to play the game. And in this, says Ms. Siddiqa, lies the key to Pakistan's story of repeated military rule. Civilian `clients' are bound in predatory partnerships with the military, in turn strengthening it institutionally and increasing its appetite for power and profit.
In Pakistan, `Milbus' is present in all three sectors: agriculture, manufacturing, and services. And it operates at three levels: as an institution, through its subsidiaries, and through individuals.
At the level of the institution, for instance, the military runs National Logistic Cell, the biggest freight transportation company in Pakistan. Its fleet of 1,689 vehicles is one of the largest in public sector transportation in Asia. The company is also engaged in construction of roads, bridges, and wheat storage facilities. The NLC is technically a department of the Ministry of Planning and Development but its ground operations are run by the army, and it is staffed by serving army officials. The net worth of NLC in 2000-01 was an estimated $68.35 million.
Then there is the Frontier Works Organisation, established in 1966 to construct the 805 km Karakoram Highway. It is now the biggest contractor in the country for constructing roads and collecting tolls. Staffed by army engineers, it comes under the administrative control of the Ministry of Defence. There are also cooperatives that carry out small- and medium-sized profit making activities and are handled at the level of the military commands. The businesses range from bakeries to poultry farms and markets, commercial plazas and gas stations.
Ms. Siddiqa says the operations of the `subsidiaries' are the most transparent part of `Milbus.' She includes in this category Fauji Foundation, which is the most well known, the Army Welfare Trust, the Air Force's Shaheen Foundation, and the Navy's Bahria Foundation. All are controlled by senior officials of the respective services or officials of the Defence Ministry.
Between them, they run about 100 different projects, including heavy manufacturing industries such as cement and fertilizer. One project makes cereal. Some of the foundations are involved in education, insurance, banking, and information technology. These concerns get a head start with the military playing a key role in obtaining public sector business contracts and in helping them secure financial and other industrial inputs. Once they are set up, they advertise their links to the military to project themselves as more efficient than similar civilian-run concerns. The importance of this is nowhere more apparent than in the real estate development ventures of the foundations. The prices of land shoot up because people believe that a development backed by the military can never go wrong, nor will it ever fall foul of the government.
The tri-service Fauji Foundation, with its 25 projects, has declared assets of $169 million. It employs 6,000-7,000 retired military personnel and is run by a governing board dominated by the army. The Army Welfare Trust began in 1971 with slightly over $12,000. Its specific purpose was to generate jobs for disabled soldiers, army widows, orphans. Today the Trust boasts of five financial sector companies listed on the Karachi Stock Exchange, out of a total of 41 projects. It has assets worth $62.1 million, and employs 5,000 ex-servicemen.
At the level of the individual, the military provides several benefits to its personnel. The boys always find jobs after retirement. The Musharraf regime has placed between 4,000-5,000 military officers through a system of preferential appointments.
There are other `invisible' benefits, such as using contacts in the military to swing business opportunities. Defence contracts are the most common. Ms. Siddiqa cites the example of the former ISI boss Lt. Gen Hamid Gul's daughter running a private bus company, which was able to get preferential access to bus routes between Islamabad and Rawalpindi.
But the biggest and the most visible perk is the rural and urban land given out to serving and retired officers. They also get subsidies and other benefits to develop the land. The estimated worth of the legally acquired assets of Pakistan's generals, says Ms. Siddiqa, is in the range of $ 2.59 million-$ 6.9 million, based primarily on the value of rural and urban properties of these new land barons. The Pakistan military, as a single group, owns more land than any other institution or group, amounting to about 12 per cent of total state land. And unlike other state institutions, the military can convert this land for private usage.
Of the 11.58 million acres of land under its control, more than half is owned by individual members of the armed forces, mainly officers. Ms. Siddiqa argues that the "monopolisation" of land by the armed forces is aimed not just at increasing the financial worth of individuals or groups within the army, but also to increase its social and political worth. "The military owes it authority to change the usage of land to its phenomenal political clout. The land redistribution policy has an impact on the relationship between the powerful ruling elite in the country of which the military is a part and the masses."
The military describes its commercial empire as "welfare" activities but the book questions this by pointing out that the main beneficiary is the officer cadre. Moreover, this is a type of welfare in which the civilian world is unable to impose any limits. What the military wants it takes. And it justifies this in terms of its role as the saviour of the nation, positing an external threat from India so great that over the years, "national security has developed into a dogma at par with religious ideology."
The external threat is also used to include internal security matters. With their eyes on getting elected, politicians are loathe to challenge this national security agenda. Through acts of both commission and omission, they acknowledge and further the special status on the armed forces, to the point where the military dominates over all other stakeholders, and has "become the state itself."
The military cannot be dislodged from its pre-eminent position in the politics, economy, and society of Pakistan unless political parties re-imagine themselves dramatically. Many advocate the much talked about "deal" between Ms. Bhutto and President Musharraf as the best political arrangement for Pakistan a marriage of convenience between an "enlightened" military ruler, and the leader of a secular, democratic party. But it is by no means a step towards the marginalisation of the military, even if President Musharraf steps down as army chief.
For observers of the India-Pakistan peace process, the book resurrects an old question: if the external threat on Pakistan's eastern border is so necessary for the military to maintain its internal supremacy, which includes its political and economic domination, would it ever allow or enable fully normal relations with India?